Midday Commentary: Crown Castle's planned mandatory deal 'looks decent'; secondary market quiet

By Rebecca Melvin

New York, Oct. 21 - Crown Castle International Corp.'s planned $750 million of mandatory convertible preferreds looked like it was going to price attractively for investors, according to traders who took a quick glance at the deal that launched early Monday.

"Mandatories aren't really my thing, but I heard it looks decent," a Connecticut-based trader said.

A second trader noted the deal's large size and the fact that it was coming concurrently with a large equity offering of 36 million shares of common stock and said, "I bet they have to price cheap just due to the size. I am a fan just on that basis."

Price talk on the Crown Castle deal was for a 4.75% to 5.25% dividend and a 15% to 20% initial conversion premium. The registered offering was being sold via joint bookrunners Morgan Stanley, BofA Merrill Lynch, J.P. Morgan Securities LLC and Barclays.

Back in established issues, the convertible market was described as "very quiet."

"It's a typical Monday," the Connecticut-based trader said.

A top volume name in trade was Archer-Daniels-Midland Co.'s 0.875% convertibles, which mature Feb. 15 and were seen changing hands between 101.875 and 102.213, according to Trace data.

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